♪ >> good morning from bloomberg's middle east in dubai. i'm manus cranny. it is your day break europe show. your top stories. bitcoin surges. elon musk puts his money where his mouth is. the price doubling by the end of the year. equities close at records.

bets for a healthy stimulus package. futures a bit softer this morning. christine lagarde promises monetary support and a significant downside risk from the coronavirus. welcome to the show this morning. annmarie flying high. parabolic. tesla super charges bitcoin. it roars higher at $50,000. it is going to be worth a trillion dollars. do you have any bitcoin? >> good morning b, manus. s&p 500 futures a little bit softer this morning but a fifth straight day of gains on wall street yesterday with the s&p 500 closing at an all-time high. 39-15. the yield preefing 2%.

brent, i know you're looking at this as well. flying lot higher. alongside bitcoin. $61. now we're hearing a chorus of traders. bitcoin 47,000 is what it topped. alof it coming from elon musk investing $1.5 billion. i'm not surprised. he has ripped up the script. tezz quite a maverick. he went direct to customers when he was selling tesla. very different from other auto producers. if you're still perturbed about crypto currency, you have to think at least this is bitcoin. >> this is the debate. we'll listen to mike in just a moment. it is something that is just a frenzy where in his view there is a value to bitcoin and some

others. i love what the c.e.o. said. this is the scarcest commodity in the world. it is digital gold. it is about the genius of elon musk. he is listening. you're going to see every company in america do the same thing. it doesn't have to be a lot. it is the messaging that matters. what elon is doing, let's just listen to mike's comments. >> i originally thought bitcoin would end the year at $50,000 or $60,000. things are happening so much faster than i predicted. the corporate adoption rate and the institutional rate is growing faster than what i thought it was. i think it could be at $100,000 by the end of the year. >> we haven't breathed between 40 and 48 bucks. is this a frenzy?

is this a mania? what are people saying to you? good morning. >> good morning. yes. frenzy is probably a good description. people just can't seem to get enough of it. it is not just bitcoin. we're seeing it as well in some other smaller cryptos as well having extraordinary gains. we have seen an acceleration this week because now we have futures as well as futures on bitcoin. one of the things going on in the background, the focus is on the cash rate of bitcoin. the futures have been used probably by some people for shorting the coin think it was too high and now we're seeing a big squeeze going on. it is rising faster today. it gives you an idea whatever tesla had to say in the past 24 hours has a significant impact on the whole crypto currency

process, not just on the biggest trading currency there. it is becoming a bit of a frenzy drawing in so many people. we have heard that the japanese government wants to raise the issue of crypto currencies at the next g-7 meeting. it is on everybody's radar. it has become mainstream. it is no longer on the edge. >> it is on everyone's radar. you heard company thes are going to have to that is right staying like -- companies are going to have to start thinking like musk is thinking. an investor had his entire tweet thread and he said no business can work with a currency as volatile as bitcoin. do you think companies are starting to think about amassing mass amounts of this kind of investment? >> it would be surprising if everybody follows what tesla has recommended.

they are a bit of a maverick company with their leader who does things his own way. that is not going to be the case for everybody. the fact that you can start to buy a variety of products, using the crypto currency. obviously something that people have to take seriously. we're already seeing a big experiment going on in china. it is widely used there. their own local version of a crypto currency. it is not going away. people will have to get used to it. the fact that it is becoming part of our day-to-day lives is obviously a good traction point for people that were involved early and will attract more people into the crypto as we go ahead. >> let's see what happens with the trade. whether we make it to $100,000. let's pivot to markets and

annmarie likes to refer to them. ahead of global portfolio solutions at goldman sachs. great to have you with us. when you look at risk for 2021. the headline level, we don't expect the same kind of alpha for 2021. we need to be more discerning. how discerning are you and where does that take me through in terms of allocation? good morning. >> good morning, manus. great to be on. thanks for having me. as it relates to 2021, just noting the overall outlook rewe remain positive. positive for risk assets. certainly with the improving economic activity that we're seeing.

secondly, we are now talking about a vaccine rollout program around the world. we think that will eventually allow for economies to open up and allow the lagging services sector to recover as well. overall macro data looks robust. we saw in q 4 earnings as well from what has been reported to date, that has come in well above expectations and we still have the prospect of further fist cal support on top of pretty loose monetary policy as well which we think will provide growth. pretty significant rotation. we see that continuing this year as well. more caps outperforming nasdaq and technology by another 6% year to date. financial and energy outperforming the financial

market. all of those are still in play. >> when do you start to worry that this reflationary trade will start impacting and hitting the equity margaret? >> i think it is a question essentially on evaluations. absolute levels of evaluation. on an absolute basis. it may seem high. it is probably worth thinking about in the context. the low rates and stable inflation environments that we're in. when you measure it on that basis, evaluations certainly don't seem as stretched and then when you look at it on a relative basis, you think about equities vs. bonds. yields, all of those look more attractive than bonds as well.

we'll see how far prices can continue. over all level evaluations look more justified. certainly with a backdrop of improving economic activity. >> various people are saying to annmarie and i there are hallmarks of euphoria. what are you going to be watching for as a red flag? >> i think it relates to ensuring the equities -- things look justifyable. obviously it needs to tie back to fundamentals. we have seen a significant improvement in earnings. it may very well be that earnings for 2020, all of the companies that have come and reported, the earnings are 140. that is higher than what we were anticipating a couple of months ago. it may well be for 2021.

we end up around $175 or so in earnings. that is a pretty improved picture relative to where we were. in terms of red flags, it is worth noting still in the midst of a significant health crisis. many economies are still locked down. looking at varntse of the virus. looking at whether or not economy also stay closed for longer. whether or not there is any disruption to vaccine delivery. looking at all of those areas as well because that may impact earnings growth this year. >> right, the vaccine is squarely in focus. the head of global portfolio solutions at goldman sachs asset management. he stays with manus and i. let's get a recap of your first word news. >> the former president donald

trump has laid out his case against impeachment saying it is unconstitutional because trump already left office and that his remarks did not incite the resurrection on capitol hill. talks are thought to have gone well. italy is facing a deep recession and the fallout of the coronavirus pandemic. hong kong's highest court has ordered that media tycoon and activist jimmy -- stays in jail as he awaits trial. overturning the decision of a lower court to release him into house arrest. he was tacken into custody di last year under hong kong's controversial new national security law. powered by more than 2700 journal estes and analysts in more than 120 countries.

this is bloomberg. annmarie? manus? >> thank you very much. coming up, christine lagarde says the euro area can count as the e.c.b. we have details. so you're a small business, or a big one. you were thriving, but then... oh. ah. okay. plan, pivot. how do you bounce back? you don't, you bounce forward, with serious and reliable internet. powered by the largest gig speed network in america. but is it secure? sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business.

>> a new surge in covid-19 cases. the mutations of the virus and the strict containment measures are a significant down cede risk to the euro area economic activity. output remains well below prepandemic levels and uncertainty about how the pandemic will evolve remains high. manus: christine lagarde

speaking to the european lawmakers yesterday. during her speech, the e.c.b. president pledged monetary support for the economy amid the coronavirus lockdown and said governments must do the same. tracking every move in europe, our reporter joins us now. lagarde had a message yesterday. the e.c.b. is staying put. what else did she have to stay? >> good morning, manus. this was a message she preeted yesterday in her remarks but also the q & a that followed. the european central bank will them european economy every step of the way and she.ed to reasons as to why there are serious downside risks to the european economy. this is a number one worry for the european government that you get a significant implication. we don't know what the vaccine

is looking like. there have been many issues and it is still very slow. she repeated the money from the recovery fund needs to be spent well and needs to be delivered and paid out quickly and she repeated in 2020 that the monetaryles to and the fiscal policy was able to come and europe was able to overcome the message that needs to resonate in 2021. annmarie: lagarde made clear the e.c.b. will not cancel debt. why is she reiterating this? >> on friday there was an op-ed published in a number of papers. it is saying that the european central bank should cancel it a and make that money direct investments. every time this debate gains traffic, the alarm starts to to

go off there. she was doing the med yao round on sunday. she was presenting these remarks. this cannot happen. no president to have european central bank would ever do this. she also said it doesn't make economic sense. what i would say however is that it is undeniable this debate is gaining traction. it is becoming much more politicized now during the pandemic. annmarie: thank you so much for joining us. back to our guest. the head of portfolio solutions at goldman sachs asset management. you have a conviction call on cyclicals vs. growth. are you worried about how low the vaccine rollout has been for that to come to fruition? >> good morning. i think it is clearly a risk.

we shouldn't forget. the public health crisis. vaccine rollout. the approval cycle. logistics associated with it. they will be effective against the variants. we expect that to continue. still certainly a headwind. overall given the data that we have seen from countries like israel from the rollout in the u.k. and the u.s., it is probably more advanced than the rest of the world. positive signs that once the governments can roll this out effectively, that should help boost the services and should help those cyclical parts of the economy to recover. we have seen signs of that already in the asian markets that have emerged out of this eller. we expect that to take place in europe as well.

certainly still head winds there with respect to the rollout. manus: what the is the risk from the oil rally? rita revamped her price call for 2022. $100 oil for next year. i put it to you. this is a risk. >> we came in with respect to our view on oil should be widely range bound. $45 to $65. we're seeing it trade at the top end of that race. probably for a couple of important reasons. the demand side, economies have started to reopen and recover. demand has increased. it is still obviously well done on prepandemic levels, particularly when you look at jet fuel. on the supply side, there has been a lot of discipline in

supply and management and the risk with opec countries. that will help keep things range bound. there is the potential to move to the upper end of that range but we still hold that over all core view. annmarie: that is a $20 gap. do you think at some point you'll be able to hone in on exactly where that will be? range is usually $5. this is $20. >> i think we expected to be on the upper end of that range this year given what we're seeing with respect to demand, recovery. and supply side discipline. so trading in the $60 to $645 range seems perfectly reasonable for this year. manus: let me throw an offer to you on this one which is i had people with me this morning saying you're going to get 9%

china growth and 6.5% u.s.a. growth. i want to focus on the china growth and what that means for europe and does that play into any -- it is a traditional question. you see people writing in 9%. these are big calls on china for this year. >> yeah, i think again, it is worth noting how much of that is to do withfects in china. china posted 2% growth for 2020. it was expected to -- this rebound from those numbers. you already started seeing some policy pricing in china. i think they are cognizant of seeking to avoid overheating and managing their liquid any their economy thoughtfully and essentially that is what we're beginning to see. over all i think the improvement in china certainly

bodes well given they were able to recover from the pandemic a lot earlier that most other economies and that should benefit europe as it roll out its vaccines. manus: first in, first out. the head of global portfolio solutions at goldman sachs. thank you so much for spending your morning with manus and i. let's quickly check on where we trade. s&p 500 futures in the green. a little bit softer in the morning. sixth day of gains on wall street yesterday. i know you love the u.s. treasury market. 1.93 on the 30-year yield. yesterday reaching 2%. oil, i think you were at the opec meeting last time we saw levels this high on brent crude. manus: you just had chill cot with his range. you berated him on the width of his call.

he capitulated. on the upper end. alex said we are heavy. if it makes it to 50, a trillion dollar market cap. coming up, microsoft's c.e.o. his view on bitcoin. this is bloomberg. ♪ are you frustrated with your weight and health? it's time for aerotrainer, a more effective total body fitness solution. (announcer) aerotrainer's ergodynamic design and four patented air chambers create maximum muscle activation for better results in less time, all while maintaining safe, correct form and allows for over 20 exercises. do the aerotrainer super crunch. the pre-stretch works your abs even harder, engaging the entire core. then it's the back extension, super rock, and lower back traction stretch to take the pressure off your spine and stretch muscles. planks are the ultimate total body exercise. build your upper body with pushups.

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>> good morning. this is day break europe. manus. the bitcoin surge is pushing crypto currency values higher. >> we have crypto currency interest in asia, pretty strong with chinese investors along with japan and korea. some outside the u.s. some of these shares linked to crypto currency and crypto

currency ex-changes are on a tear. specifically in japan. it is at june 2008 highs jumping the most in almost three years to date. shares have actually doubled since the beginning of the year riding on this tail wind from the bitcoin frenzy. we're hearing the head of the crypto currency excheaning in singapore said just imagine what kind of impact this would have if we saw a similar move from companies like tesla, even if 100 companies started putting 1% in bitcoin what it would mean for the market and supplies. there is starting to be more regular nation hong kong. there are about 50 bitcoin machines in hong kong.

you could see beijing start to crack down because they see this as a potential concern. manus: thank you very much. juliette saly in singapore on bitcoin.

♪ annmarie: good morning. this is day break europe. here is what you need to know. bitcoin surges to a record after elon musk puts his money where his mouth is. u.s. equities closed at records yet again. invest for a healthy stimulus

package. futures a bit soft this morning. christine lagarde said there are significant downside risks from the coronavirus. i know we're all excited and want to get to bitcoin's record but first an asset check. 6:30 in the morning. where do we trade? manus: you have the longest rally on your hands since august of last year. it is going to be a choppy ride. don't forget that. bank of america said it is a euphoric sign. mutual on the index. they want to go value over growth. there is the 30-year paper. we did make it up to 2%. that's what the fed wanted. is that a trigger for reevaluation of your equity exposure? no, there is still a long way to go. yields can trade quite a bit higher. oil above $60. and the market is tightening

and there is a view, rechanged her call for $100 oil. you have tight markets coming. a warning about caution. there is bitcoin. i bought a bunch of bitcoin when i was young. i was young one day. annmarie: you still are. you're actually the first one who said bitcoin is the millennial gold which a lot of people are getting used to that. how they want to use their money and where they are investing in. i think what is so interesting in this. you have been talking all morning. what mike novogratz says. 25% down in two days. if you were the c.e.o., that might be a hard pill to follow. you can see what mike has to say about what he thinks

american companies will be doing this. manus: it is fascinating what they have come up with. it is going to be maxed out by 2040. that is bitcoin relative to the supply of tesla. it is diplomatal gold. annmarie: that's what you have been telling me for years. we spoke to mike novogratz. he sees it double. take a listen. >> i thought bitcoin would end at $50,000 to $6,000. things are growing so much quicker than i had predicted. it is accelerating beyond what i thought about. bitcoin could end the year at $100,000. annmarie: mike novogratz there. bitcoin hit a fresh record over

$47,000. let's go to laura wright. >> president biden's covid bill pledges ahead to raise the minimum wage up to $15 an hour by 2025. lawyers for former president donnel trump have laid out their case of impeachment arguing the second trial is uncushion constitutional because he has already left office. protests are continuing across myanmar after the army imposed a military curfew. the leader and other civilian leaders are in detwedges the army disputing election results. global news 24 hours a day.

and on bloomberg quick take. powered by more than 120 journalists and analysts. manus: thank you very much. let's turn our attention to the earnings season. it continues. a close margin for the fourth quarter. seeing significant headwind from the pandemic with the two largest markets, europe and the u.s. still facing lockdown and restrictions. let's get to jack. hen we exit lackdowns, when the vaccine rolls out and we reopen. do you get the sense that we're going to see a spike higher in temporary employment or full time employment when that leaf comes? good morning. >> yes, good morning. by the way, i heard your introduction. we're not facing any headwinds. we see a spectacular rebound

from minus 13% revenue to minus 3.6. in january, we were at prepandemic levels. that is the good news. that is prevaccine. it is going to be temporary probably because we see that a lot of companies find themselves not flexible enough, not agile enough. they are going to be going for temps. annmarie: what is the impact? on recruitment when government spending and furlough schemes start to unwind? >> that is interesting. because if you look at labor market trends midterm, we had scarcity before covid and we are already underlying, seeing some sectors seeing that

happening again although there will be a lot of people we need to face. there will be enough work out there i think but probably not for many people in certain sectors in the job you were doing before covid. i urge everybody to really, really take a hard look at the labor market at large. manus: that's about reskilling and redeveloping my own career. when this state aid ends, what is the impact on wages? takeses through your thinking on that. >> it is different in anglo saxon market where is this goes up way mar than in european markets, it is mostly governed so we see less immediate spikes. if you are in a good position, n.i.t., technology, that sort of thing, you can get yourself a good wage and probably a better wage.

annmarie: if i could go back to the state aid. when will we see real employment numbers surface? those not relying on any state aid. will it be this year or is this something to think about for 2022? >> that is going to be tough. in the u.s., people that have jobs are mostly in the affected sectors, hospitality. if governments continue their support, until seven vaccinated, that is costly but then unemployment won't spike. manus: jacques, one big thing that we're touching on. i'm going to rip up the traditional earnings report script. we're talking about bitcoin. mike novogratz is talking about companies and corporates employeing bitcoin. can you say how quickly people will accept it in form of

payment? is it something you have talked about? >> no, we don't. for myself, if i don't really understand something i'm not too optimistic eebt about it. beyond bitcoin. no. that will be a long time out i think. annmarie: do you think large staffing companies that at some point given what musk has done will start to think about this other payment type even if it is not right now? is this something potentially on the outlook for 5-10 years, that kind of trajectory? >> not with the currency that has the spikes and the drops and what we're seeing now. i think the majority of the people that work for us need to leave the money to live. i think bitcoin is highly

speculative. i would urge anybody that has money to spare not to do something in bitcoin. the payment will go maybe directly to banks. that sort of thing. crypto currency. manus: you're not alone in not understanding and not being fully convinced by bitcoin. i need more detail on that before i can dig a little bit deeper. let's talk about the opportunity. there is going to be companies that will not survive. that are going to need help. are you ready to buy businesses? are you looking at any geography where i have to deploy capital? this is where i want to go . if >> absolutely from a geography point of view, u.s. and japan. for my sector, in technology, outsource business and engineering. it is not like companies are in dire straits. you look at our numbers.

we're doing better than most markets we're in. i think our numbers bode better than the general sector. the sector is not hurting as much as we thought in april. general good news. i will not expect any bargain buys. annmarie: thank you so much on your earnings and playing along with the bitcoin frenzy today with manus and i. thank you so much for your time. coming up, the retail bid failed to -- the way it did game stop. our guest says a background effect lingered. what is it? that is coming up next. this is bloomberg. ♪ ♪

annmarie: an investment idea that starts on red it ends up here in the streets of london. after getting name checked

investors poured money into a silver e.t.f. thanks to a weird quirk, commodity e.t.f.'s are backed by the physical asset itself. if i wanted to, i could turn in a share of the e.t.f. and get the silver back. it needs to be stored somewhere. it is scored undergrowth in vaults in london. taken together there is 40,000 tons of gold and silver underneath the streets of london. that is heavier than the statue of liberty or three brooklyn bridge or four eiffel towers. now as to location of these vaults, it is a closely guarded secret. one of the few that we know about is underneath me here in a vault at the bank of england where they store about 400,000 bars of gold. there is also secret locations

owned by hsbc and jpmorgan. we spoke to an expert about this. >> when you see the vast quantity tiss of gold being held by some of these products, it is kind of intriguing and it is amazing. but if you see the detail that goes along with the products, there are very important aspects of what happened that each of these providers make sure they are getting it done. they are counting a gold on an annual basis, on an interim basis. they are inspecting the gold and making sure that the gold is of a particular standard and actually validating everything is accurate that is being reported out. >> when it comes to the gold e.t.f.'s, the largest is owned by state street and it is kept at the bank of england and hsbc's vault. when we asked if we could visit it, we were told no. not only for fear that we would

expose its locations for would be robbers but anyone who goes to visit it could be a kidnapping target. people may technically own it but will never be able to visit it. annmarie: bloomberg's dani burger. a kidnapping threat. getting name checked on the wall street bets. trades of all kinds poured into silver e.t.f.'s. prices have yet to return to their previous level. joining us is an absolute metals guru. let's start with what dani said about silver. retail investors piling in. they left a little bit of a lasting imprint. >> that was such an interesting

segment. you're right. i have tried for more than a decade to get, just to see where some of those vaults are and to get into some them. i have never been able to. i understand dani's frustration. annmarie: i think for your safety. >> [laughter] part of that effect we have seen, the prices have come back a little bit but in those vaults the numbers that we see coming out of them, we see a lasting imprint has been left. a week ago, they contained 28,000 tons of silver. right now they contain more than almost 31,000 tons of silver. people that bought silver and held on to it, prices come back a little bit. the squeeze didn't quite pay off. there has been a lasting impact tonsil ver market.

manus: let's talk about gold. $1840 at the moment. dollar continues lower. that is going to be a choppy ride. what is it that drives gold's value? is it this obsession that we have ever day? is it dollar or supply? what is it? >> the gold market is phenomenally interesting. that's why i dedicated my career to it. really all of those things play a role. at the moment, the biggest factor is real rates. right? so if we see the long end of the treasury yield keep going up, that is very negative for gold. when you put gold in one of those walks under london, you pay a fee. it doesn't pay you any yield. and you pay a fee.

that is the problem for gold. the second problem for gold investors is that we're going to -- gold is still a physical asset. still a jewelry asset. we are going into a period where we go into the lunar new year where china stops buying. it makes gold particularly vulnerable for the next three or four months going forward. annmarie: yesterday we got into a twitter debate about the energy bitcoin uses. do you think this run up to what we have seen in the last 24 hours all have to do with musk? i thought hedge funds that bought in on fundamentals of game stop but sold out when they thought it was overmatched when musk started tweeting. can what he does do b the top of any trade? >> i don't know this point marks the top yet. it feels like this trade has a

little bit more to go. unless we see a collapse in risk assets. definitely something like a musk tweet can lift the market like bitcoin. because these are driven by investors who get excited about things. they are called bedlam good. it is kind of the opposite of a normal -- when it goes up, people buy less. we're seeing people getting excited about this trade in a way they have not since 2017. so yes, big celebrities particularly like elon musk who is seen as a visionary by many. when he talks about bitcoin and the future of money, he puts his money behind it, that is something that gets him excited and that pushes up the bitcoin price.

manus: you have seen those moves many times before. when you see a squeeze like that or a rally, sometimes they pause for thought. what do you make of the piece on supply, bitcoin to tesla and that supply will be negative for bitcoin relative to tesla over the next couple of years? that is another driver, isn't it? >> yeah. you're reet. look, bitcoin does collapse from time to time. there is no mistake. it is still not perfect for all investors. on the old tesla trade, i think that is interesting. because what we are seeing, it is really interesting what musk has done here. normally it is the c.e.o. or director who decides to, you know has an option to invest in production or invest in nonproductive assets. for musk to go and buy bitcoin here, breaks economic theory a

little bit but it has been positive both for tesla and bitcoin. that is an interesting move. manus: there you go. thank you so much for being with us. he is smarter than me. a lot richer than me. our markets live editor. are we taking a break or looking at bitcoin? i think we're taking a break. coming up the state bond market gets an electronic makeover. we have the represents of the survey. it is next. this is bloomberg. ♪

manus: day break europe with manus cranny in dubai. the corporate bond market has

long resisted change to electronic trading. they cling to the old ways but the pandemic may be breaking the old habits. dani burger has the inside track. >> we have seen options, so much so that 100% of the trade rs they surveyed said the adoppings electronic trading would be the next thing coming for the market. part of this has to do with pandemic. when we have very larceny volumes, a lot of bond traders found it easier to move those bids over to the electronic trading exchanges rather than picking up the phone allowing them to free up some brain power for the more complex transaction. it got more votes than algo trading or voip. mobile trading has become one of the more influential

technologies. i asked scot wacker about it. take a listen. >> in many cases you have to rely on mobile technology if you want to trade. for instance, we're quite active for instance in the metals markets in china where we have scrap dealers in various parts of china henling their metal risk using their phones trade institutional loss of base metals. >> so a total of 33% of traders see mobile technology as the next big thing for trading. annmarie: thank you so much. we're just over an hour away from the start of european trading. futures across the board now in the u.s. and europe are lower this morning but bitcoin and oil higher. manus: risk on. at what juncture does the rise in the bond yield interfere with the dinnerable.

there is still a long way to run. 240 is the inflection point for them. anna and matt will take you through bloomberg's market open. this is bloomberg. ♪

♪ anna: good morning. welcome to bloomberg markets. the european open. i'm anna edwards. alongside matt miller in berlin. matt: good morning. the markets say inflation is back. u.s. equities closed at records and break evens hit a six-year high. how long before equities will start to feel the heat? the cash trade is an hour away.

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